Too Big A Risk

COMMENTARY/FORUM

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Wall Street Will Be Only Sure Beneficiary Of Privatized Social Security

February 1, 1999|By DOROTHY SIEGEL

We are told that Social Security is in crisis: The system is going broke and there will be no funds to pay benefits for baby boomers. Let's take a look at the facts.Those who want to privatize Social Security have for years misled Americans into believing that diverting payroll tax money into individual retirement accounts will make them millionaires. In fact, it is the furthest from the truth. The financial security of everyone will be at risk. Social Security was designed to provide income for retirees, as well as disabled workers, their dependents and surviving spouses and children of deceased workers. It is financially sound until 2034. At present, there is a $101 billion surplus in the trust fund. So, where is the crisis?

Social Security has 45 million current beneficiaries, of whom 4 million are disabled, 5 million are widows and widowers, and 3.5 million are children. In addition, there are 77 million baby boomers.

It is critical that we review this proposal carefully before shifting from Social Security that is provided today to a totally privatized one. The mechanics of a privatized system could take year to implement at a cost of $2 trillion dollars.

What the privatizers want to do is to have all or part of the payroll taxes each worker now pays into Social Security go instead to individualized retirement accounts. It doesn't take a financial wizard to see what a downturn in the stock market would do to future beneficiaries.

So, who would endorse such an idea? Wall Street, that's who. They will reap unprecedented profits if they get their hands on the Social Security Trust Funds.

When adjustments and modest reforms are added to future projections, Social Security is shown to provide a larger and more reliable return than high-risk investments, which could leave you broke.

Remember, Social Security is an intergenerational program. With workers paying less into the trust fund, the government will have less money available to pay benefits.

This misguided proposal carries the potential of sabotaging the system and jeopardizing the solvency of future beneficiaries.

Undermine this great program and you undo all the good accomplished over the years. Let's not jeopardize the quality of life of millions of Americans while enriching Wall Street.

The author, a resident of Delray Beach, wrote this for the Sun-Sentinel.